Define net borrower, net lender, creditor nation, and debtor nation. Discuss the difference between a net borrower and a debtor nation
What will be an ideal response?
A country that is borrowing more from the rest of the world than it is lending to the rest of the world is a net borrower. A country that is lending more to the rest of the world than it borrows from the rest of the world is a net lender. A country that during its entire history has borrowed more from the rest of the world than it has lent to the rest of the world is a debtor nation. A country that has invested more in the rest of the world than other countries have invested in it is a creditor nation. A net borrower is a country that is currently borrowing whereas a debtor nation has a stock of outstanding debt. Borrowing is a flow variable and the outstanding debt is a stock. Thus a net borrower could be a creditor nation that is currently borrowing or it could be a debtor nation that is currently borrowing and thereby increasing its debt.
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A. a quantity effect, which is an increase in revenue that results from selling fewer units of the good. B. a price effect, which is an increase in revenue that results from receiving a lower price for each unit sold. C. both a price effect and quantity effect. D. a decrease in quantity demanded.
A kinked demand curve is associated with
a. perfect competition. b. monopolistic competition. c. an oligopoly. d. public utilities.
The term "balance of trade" refers to a nation's:
a. goods exports minus imports. b. current account balance. c. capital account balance. d. net balance of all international transactions.
A star basketball player signs a contract that newspaper reports say is worth $10 million. The player receives $5 million on signing, and $5 million a year for three years. The contract is worth
A) $10 million as reported in the papers. B) less than $10 million since the present value of $5 million received one or more years from now is less than $5 million. C) more than $10 million because the present value of $5 million received one or more years from now is more than $5 million. D) either more or less than $10 million, depending on the value of the discount rate.